INTERNAL CROSS-SUBSIDIZATIONS IN THE GENERAL FREIGHT SECTOR OF THE MOTOR CARRIER INDUSTRY

A major area of controversy in the debate on regulatory reform of the motor carrier industry is the degree of internal cross-subsidization between small and large shippers and shipments, localities, and different commodities. This paper uses a microlevel ecnometric model of the motor carrier firm, with Interstate Commerce Commission (ICC) cost study data and class rates approved by the ICC in early 1976, to determine the probable existence of internal cross-subsidizations between shipments of different weights that are moved between metropolitan areas belonging to different population categories. The paper reveals extensive cross-subsidizations of this sort and of another sort: between shipments moving in different traffic lanes and rated in different class rate classifications. The ICC's cost methodology can also cause internal cross-subsidies. Use of cost-related, point-to-point, and multiple shipment tender rates to eliminate internal cross-subsidies is recommended, as are changes in the ICC's motor carrier costing methodology. /Author/

Media Info

  • Media Type: Print
  • Features: References; Tables;
  • Pagination: pp 49-54
  • Monograph Title: Surface transport regulation and railroad planning
  • Serial:

Subject/Index Terms

Filing Info

  • Accession Number: 00196878
  • Record Type: Publication
  • ISBN: 0309028329
  • Files: TRIS, TRB
  • Created Date: Aug 28 1979 12:00AM